Assessment against amalgamating company held void where company ceased to exist; relief granted to taxpayer.

An assessment framed in the name of an amalgamating company that has ceased to exist is void because the approved scheme of amalgamation transfers liabilities to the transferee and the transferor ceases to be a taxable person; accordingly assessments against a non-existing entity constitute substantive illegality rather than mere procedural defect. Precedents cited treat such orders as incurably void and hold that participation by the extinct entity cannot estop the law. On that basis the High Court allowed the petition and granted the relief sought in prayer (a).

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Issues Involved:
1. Propriety, legality, and validity of the notice dated 30th March, 2019 issued under section 148 of the Income Tax Act, 1961.
2. Validity of the assessment order dated 31st December, 2019 passed under section 144 read with section 147 of the Income Tax Act, 1961.
3. Jurisdictional issues regarding the issuance of the notice and the assessment order.
4. Breach of principles of natural justice.
5. Applicability of the legal principle concerning assessment orders against non-existing entities.

Issue-wise Detailed Analysis:

1. Propriety, Legality, and Validity of the Notice Dated 30th March, 2019:
The petitioner challenged the notice dated 30th March, 2019 issued under section 148 of the Income Tax Act, 1961, arguing that it was issued to a non-existing entity, M/s. Tecnovate Esolutions Pvt. Ltd. (TSPL), which had ceased to exist post-amalgamation with M/s. Intelenet Global Services Pvt. Ltd. effective from 1st April, 2010. The petitioner contended that the notice was issued based on a misconception and was an inadvertent error.

2. Validity of the Assessment Order Dated 31st December, 2019:
The assessment order dated 31st December, 2019 was passed under section 144 read with section 147 of the Income Tax Act, 1961, computing the total income at Rs. 14,50,95,452/- in the name of TSPL. The petitioner argued that the order was passed without considering the replies and objections raised by the petitioner, and it was issued in the name of a non-existing entity, making it void ab initio.

3. Jurisdictional Issues:
The petitioner argued that the impugned notice and order were issued without jurisdiction as the proceedings should have been initiated by the officer having jurisdiction over the petitioner (i.e., respondent No. 3) and not respondent No. 1. The petitioner emphasized that post-amalgamation, any proceedings could only be initiated against the existing entity, Teleperformance Global Services Pvt. Ltd. (TGSPL).

4. Breach of Principles of Natural Justice:
The petitioner contended that they were not afforded any opportunity of hearing, and the notice dated 4th December, 2019 was neither served on the petitioner nor uploaded on the e-portal. This constituted a breach of the principles of natural justice.

5. Applicability of Legal Principle Concerning Assessment Orders Against Non-Existing Entities:
The petitioner relied on the Supreme Court's decision in Principal Commissioner of Income Tax, New Delhi Vs. Maruti Suzuki India Ltd. (2019) 416 ITR 613 (SC), which held that an assessment order passed in the name of a non-existing entity is a substantive illegality. The Supreme Court had observed that such an order is not a procedural violation and cannot be cured under section 292B of the Act. The petitioner also referred to other decisions, including CIT Vs. Spice Enfotainment Ltd. and CIT Vs. Micron Steels (P) Ltd., which supported the contention that assessment orders against non-existing entities are void.

Conclusion:
The court found merit in the petitioner’s arguments and held that the notice dated 30th March, 2019 and the assessment order dated 31st December, 2019 were issued without jurisdiction and were void ab initio as they were issued in the name of a non-existing entity. The court also acknowledged the breach of principles of natural justice and the jurisdictional issues raised by the petitioner. Consequently, the petition was allowed, and the impugned notice and assessment order were quashed and set aside. The rule was made absolute in terms of prayer clause (a), and the writ petition was disposed of accordingly.

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